The Competition and Markets Authority (CMA) and Civil Aviation Authority (CAA) have issued an open letter to airport operators regarding their obligations under competition law.
The letter states that the CMA “has recently received intelligence to suggest that some UK airport operators might not always be complying with competition law”. It notes an obligation on airport operators to publicly consult on airport charges under the Airport Charges Regulations 2011, but suggests that more information may have been disclosed or even discussed between competitors (including as regards future strategies) than was necessary under those rules, concluding that there may have been a breach of UK competition law. The letter acknowledges that the Covid-19 pandemic and impact of the Ukraine conflict have resulted in extraordinary pressures and uncertainty for the aviation sector, but such considerations do not provide a defence against competition law infringements.
There is a tension between the regulatory need for transparency on airport charges in this industry and UK competition law, which prohibits companies from sharing sensitive information with their competitors along with a wide range of other anti-competitive practices. Indeed, “price signalling” cases have gained in prominence in recent years, as demonstrated by a 2016 CMA order prohibiting cement producers from sending generic price announcement letters to their customers, and a 2016 commitment decision by the European Commission in relation to the container liner shipping industry.
It is not clear why the CMA and CAA decided not to take enforcement action on this occasion. Possible reasons include a lack of confidence on whether an infringement could be established to the requisite standard (the legal test for this conduct is somewhat complex), a need to focus resources on other cases, and/or a belief that the behaviour was insufficiently serious to merit a formal investigation. Nevertheless, the open letter provides a timely reminder of the CMA’s enforcement focus, the fact that even extraordinary commercial challenges do not provide a defence, and that any form of agreement or concerted practice (including isolated exchanges of commercially sensitive information) is sufficient to breach UK competition law, and can even do so where communications take place via a third party or in the public domain.
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